Steel and Steelmaking on the Threshold of the 21st Century

Undoubtedly, steel will enter the 21st century as the most important material with the most versatile applicability. This is just the extraordinary and permanent inherent innovative ability of steel, in the form of its inexhaustible potential wealth of development of products, technologies, and commercial attendability, which enables steel not only to keep its position as one of the most fundamental materials, but also to enter new spheres of its usability. However, management of the steel industry, research and development, as well as organisations like economic branch federations must encourage proper utilisation of this potential.


Steel products are a traditional commodity of foreign trade, and hardly any producer in the world with the exception of some countries of south-eastern Asia can still afford the luxury of supplying only to one’s own country. Dependence of 60 % of production on export is nothing extraordinary in steelmaking. This refers to steel works in the Czech Republic in full extent.


Another pronounced element of the change is investment in the activities of processing steel, i.e. the so-called downstream activities, and distinct differentiation of steel production between the developed and developing countries consisting in the orientation of developed countries to a more exigent production range where it is possible to maintain a high level of wages. A fine shower of joint ventures already realising capital interconnection independently on state boundaries for a long time is now absorbed by a more pronounced tendency to establish so-called strategic alliances. Here is not only joint venture involved as a form of capital penetration into foreign markets, but also an intricate trend of strategies for how to encourage the further existence of steelmaking under the conditions of market globalisation, competition growth and internationalisation of proprietary structures. Their part includes, for instance, the tendency to abandon export in territories suitable for enterprising and capital valorisation and to prefer building production capacities in these territories or to get rid of equipment for some finishing operations like plating and length preparation, and to entrust them to service centres which manage it in a more effective manner.


In addition, the economic advantages of steel cannot be neglected. Steel is perhaps the single material whose world price did not adhere in the last decade to the general growth of the price level of raw materials, energy, human labour and living cost. Even in spite of increased investments in ecologisation of metallurgical production, steel is today sold at lower price than before. It is also a very favourable material in regard to price in some ways which were previously very expensive such as, for instance, stainless steel whose percentage in the product mix of the advanced countries remarkably increases.


Meanwhile 55 % of steel is recycled at present, this share in glass is 45 %, paper 35 %, in case of aluminium merely 27 %, and plastics are recycled in 10 % only. Possibilities of further growth of steel recycling are indisputable and dominant.


Permanent problems and bones of contention are protectionist anti-import measures. We may state here that steel export from the Czech Republic and the Slovak Republic to geographically well situated EU countries - especially to Germany - is regulated in a regulation mode approved by both parties. For the so-called sensitive commodities, a dual licence system based on limiting and monitoring trade with these commodities both with us and in the importer’s country is agreed and practicised. A more relevant threat may be, however, the efforts of manufacturers in some countries to replace volume limitations through dumping actions.


It may be traced back from the long-term development of steel production volumes that the situational conditions of the steel works cycle depend on market situations between high boom and what may be classified really as crises. The cycle’s length ranges between 4 and 6 years as a rule. The second to last attenuation saddle which hit especially Europe and Japan threw many works in these regions into losses, whereas our steel works remained in the profit zone owing to coping with large export volumes and utilising temporary comparative advantages. If we include into enumeration the last attenuation of demand from which the steel industry in the whole world recovered in the last year only, there were already eleven attenuations after the 2nd World War.

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